Customer relationship management (CRM) software is a platform that benefits both merchants and shoppers. Businesses get a set of tools that help them cultivate lasting, meaningful and profitable relationships with customers. Customers get a personalized experience and the royal treatment to go along with it. The benefits of CRM stretch across the entire sales cycle, from identifying prospects and converting them to loyal customers, to keeping them satisfied and returning for more.
What Is a CRM?
CRM solutions enable businesses to store and manage all their customers’ data. That data can be mined for insights, used to automate marketing and sales processes, forecast future sales and much more. There are many companies offering CRM software, each tuned to help businesses achieve different goals and objectives.
Top Benefits of a CRM System
This may feel obvious, but is true nontheless: the primary benefit of CRM solutions is to help you better manage your relationship with customers. Sure, it helps you manage those relationships in a variety of ways. But at the end of the day, all the benefits are just another way to enhance your relationships with customers.
Centralize Customer Data
One of the major benefits of CRM is that it puts all your customers’ information in one place, where all stakeholders can see it. A central database made up of everything you know about your customers underpins all the other cool stuff that you can do with CRM platforms, like automating tasks and understanding customer behavior.
Most importantly, CRM keeps stakeholders across the organization on the same page. This is especially important in businesses where sales, marketing and service departments are spread out across different locations, or where they interact with clients throughout different phases. With all the relevant customer information at everyone’s fingertips, the entire organization is better prepared to delight the customer.
Let’s say you own a chain of stores where you sell propane and propane accessories. When a local restaurant signs a contract to buy your propane, the service department can see and act on it in real-time. They can schedule the initial appointment to turn on the customer’s service along with regular maintenance. And since marketing knows when a part is nearing the end of its life cycle, they’ll know exactly what to offer and when.
Identify and Convert More Leads
You try to rope people in with ads on social media. You start a blog. Sometimes, you even do it the old-fashioned way and set up a booth at a trade show. But once you have their attention, then what? Do you even know if you have their attention? If you had a CRM you would gain these insights and more. Another one of the many benefits of CRM: it is the framework on which you can optimize your lead generation funnel.
With a CRM, you can capture all of your interactions with prospects and customers, no matter where you’re trying to attract them. You can embed forms on your blog to capture contact information, and identify which keywords are bringing more attention to your page. The CRM can also scour social media and qualify leads based on user activity, and integrate that data into automated, personalized marketing campaigns.
Increase Customer Retention Rates
The cost of winning new clients is five to 25 times more than it is to keep existing business. So
keeping your existing clients is key to your long-term success.
Marketing-focused CRMs help businesses achieve this in a few ways. Since customer data is shared across departments, it’s easier to anticipate problems and solve them faster. CRMs can also prevent customers from leaving because of neglect, by nudging salespeople to make contact, or by automatically emailing the customer every so often.
Make Intelligent, Data-driven Decisions
Many CRM platforms offer data analytics tools that enable businesses to unlock insights that are invisible to the naked eye. You can measure just about anything from customer sentiment and whether you’re meeting their expectations, to your sales team’s performance or how well that last marketing campaign did.
You can create dashboards to organize customers based on different characteristics or demographics or automate lead qualification. This can help you target specific parts of your audience with different marketing campaigns that will make the biggest impact.
These insights can also help businesses more accurately forecast, and take the guesswork out of planning for the future. You can leverage insights about your customers, pipeline, sales performance and forecasts from data analytics tools to decide what product to make next, or how to improve customer service.
Let’s go back to our propane business to see how data analytics leads to smarter, data-driven decision making. One day, you build a dashboard to see customers’ monthly propane bills by the grills installed. You notice that restaurants that use a particular type of grill rarely call for service, and have a bill that’s 10% lower. You might then reach out to all the restaurants in town that don’t use that model and offer to swap out their units if they sign up for your propane service.
Read More: What Is Customer Intelligence?
Automate the Boring Stuff
CRM solutions free team members from time-consuming, error-prone tasks. For example, a marketing professional can send 1,000 personalized emails about a flash sale starting in a few hours to customers based on their location. It can also help qualify the mountains of leads so you can reach customers before they’ve forgotten you. The sales department can automate which sales rep is assigned the new prospect, or to manage service tickets.
Ultimately, the main benefit of automation is that sales, marketing and customer service professionals can focus more of their attention on what matters the most—attracting, nurturing and delighting customers.
Make More Money
CRMs can have quite the impact on some important metrics. The folks at Zoho claim that CRM can help customers improve lead conversion rates by 300%, improve customer retention by 27 percent, and shorten sales cycles by 24%. They also found that revenue per sale increased by 41% while saving 23% on sales and marketing costs. In other words, CRM can help you make more sales at a higher value, faster, and for less cost.
Frequently Asked Questions
What is a purchase funnel?
The purchase funnel—also known as a marketing funnel or sales funnel—is a model that describes the steps that consumers take before making a purchase. The steps are awareness, interest, desire and action. CRM solutions are built with the purchase funnel in mind.
What are the different types of CRM?
While there are many companies offering CRM software, three common types are analytical, operational and collaborative (sometimes referred to as strategic). Each is tuned to achieve different goals and objectives. Analytical CRM enables businesses to collect and analyze data. Operational CRM enables businesses to automate processes. Collaborative CRMs provide all stakeholders with access to customer data.
Who uses CRM?
Every kind of business can use a CRM. It benefits merchants by providing insights into their customer base and providing marketing opportunities. Project managers may use a CRM to collaborate with team members on larger projects. Developers and customer service representatives use CRM software to track bug reports and resolve issues with customers.
What is an open-source CRM?
An open-source CRM offers businesses a high level of customization. Instead of being developed and controlled by one company, it consists of a source code published publicly and shared by users and developers all around the world. What makes an open-source CRM beneficial is that anyone with the know-how can “open up” the software themselves and change features, interface elements and virtually anything else as they see fit.
The fun (and useful application) in using public source code is that businesses can tweak and update it, however, is seen fit based on the design and growth of the company. Open-source software, such as a CRM, is ideal for niche businesses requiring specific features not offered by the large traditional platforms.
My business is very small. Do I need a CRM Solution?
No business is too small for a CRM solution. Even if you have very few customers now, a CRM can help you find and reach new ones more effectively.